Holacracy: a different kind of revolution

Beloved readers,

Today we’re talking about one of the hottest keywords that are waved around when talking about new organizational practices: HolacracyⓇ. When mentioned in articles or conversations, the following explanations as to what it is and what it’s for are usually contradictory, confused at best, if not completely inaccurate. Intrigued, we wanted to know more. We read Brian Robertson’s (the pioneer behind HolacracyⓇ) HolacracyⓇ, the new management system for a rapidly changing world, in which he explains the basics of the Holacracy Practice. It’s a pretty practical reading, but still wasn’t enough for us to grasp the full measure of what it actually means in practice for organizations: we wanted to know more. So we went to the source and asked Brian (review his interview here) and his coach team (Chris Cowan, Rebecca Brover and Eric Graham) at HolacracyOne to shed some light on this perplexing concept. Here are the key notions you should have.

1/ It’s an organic structure

Here is a very simplistic view of how it works. The organization is composed of different circles, each expressing a purpose serving the overall common purpose of the organization. For instance, if the overall purpose is to deliver the best food to customers, one circle’s purpose could be to find the best products to cook and supply them. Individuals are assigned to roles, each accountable for serving one aspect of the overall purpose. The leader of each circle (designed by the leader of the circle it’s incorporated in) assigns individuals to roles and sets priorities (amongst other things). Each role has full authority to make decisions to fulfill its purpose and deliver its accountabilities.

Now, there are two types of meetings enabling the process. Governance meetings revise roles and processes, making sure the organizational structure answer to the organization’s needs and enabling incremental evolutions. Tactical meetings deal with operational needs and issues, enabling teams to synchronize.

2/ It’s not a model, it’s a framework

First and foremost, unlike most self-management home-grown solutions, HolacracyⓇ is not a self-management organizational model in itself, but rather it provides a framework that enables companies to develop their own self-management model. It’s kind of like the OS allowing your phone to work: it helps run operations but it doesn’t determine them. So HolacracyⓇ won’t tell you how to remunerate your employees or how to decide on your strategy. But it will give you a framework to find it out in adequation with your company’s purpose, and to adjust along the way.

“The goal is to make revolution accessible” Brian

The thing is, when companies decide to radically change their organizational model, it takes them years of experimentation to find out what works for them. It consumes time, energy and money. HolacracyⓇ was designed as a shortcut, providing a proven and codified process to adopt self-management that continues to evolve.

3/ It’s generic and open source

The Holacracy Practice is meant to apply to any organization or industry. According to Chris, Rebecca and Eric, they work with a wide range of organizations, from very traditional companies in the insurance industry to NGOs and startups. Most of their clients usually come from a “Green paradigm” background, as described by Laloux (more here), that doesn’t allow them to solve specific problems, and are looking for a new codified and scalable framework to help them evolve. When looking at the size of the organizations adopting HolacracyⓇ, examples of large corporations remain scarce, as for now their largest practitioner is Zapposwith +1,500 employees. However, pilot projects are currently run in larger organizations such as the Washington Government, Danone or Engie in France. The results should be interesting.

The HolacracyⓇConstitution is open-source and version-controlled. Thanks to the feedbacks practitioners share on the Community of Practice, HolacracyOne is currently working on version #5. In Brian’s own words, the Holacracy Practice reaches massive interest. It took them 5 years to get 2 companies, and now they are accompanying about a 100 organizations. Moreover, they estimate that roughly 1000 organizations have adopted it - as the Constitution and the tools are open source, it’s hard to know precisely how many organizations are using HolacracyⓇ.

The HolacracyⓇ virus is spreading to Europe, Latin America, China, Dubai, Indonesia...so what about the impact of cultural differences? Chris said that they “have yet to find a culture where culture is a stopping block.” As a framework, HolacracyⓇ stays the same, it’s how companies embrace and apply the rules within their culture that matters.

4/ It’s a codified, thorough tool

What strikes (and frightens) most people reading Brian’s manual to HolacracyⓇ is how difficult it is to understand what it actually looks like, how these rules and concepts are used in an organization, and what they produce. Although Brian tries his best to give real lifelike simulation examples, it’s a bit like reading the basketball rule book. It’s not fun, and you don’t get the overall gameplay, the point of it, nore the subtleties. Why would anyone try to shoot into a small hoop for fun? Like any sport or game, practicing is key to understanding.

“There’s a learning curve. It’s a huge challenge, but once you get the rules you flow through them.” Brian

The HolacracyⓇ framework sounds very rigid and difficult, but it is actually pretty simple and straightforward. Most companies have different levels of rules, and most of them are implicit. It takes a long time to figure them out, and once you do they can change without notice, which makes it hard to be efficient. Instead, HolacracyⓇ has a 20-pages rule book expliciting clearly what can be expected and how processes work. Rules are deeply codified to enable the organization to function and express its purpose seamlessly. They are indeed strict on some levels, but flexible on others.

Chris took the image of a house. Some things need to be strong and rigid, like the house’s foundations and bearing walls: that would be the HolacracyⓇ Constitution and how the governance and tactical reunions are run. But some other things need to be flexible, like the furniture, the wallpapers, to make it feel like home: how you prioritize actions, how often you hold reunions, and all the ‘apps’ you can develop with the system.

5/ Processes are the boss

Let’s get a few things out of the way: HolacracyⓇ is not a question of happiness at work. There. We said it.

When asked about it, Brian quotes Viktor E. Frankl and adds that happiness is not a useful goal to pursue in a company. It is way more interesting to make sure people are fulfilled in their roles.

It’s actually the whole point of HolacracyⓇ. The framework aims at reducing as much as possible the impact of human passions on the process of expressing the organization’s purpose, by integrating them into processes. As explained in the book, it’s not about structuring individuals, but structuring roles and functions within the organization. Instead of structuring a mere power-based relationship between people - who gives orders to whom -, HolacracyⓇ structures work within the system and clarifies the limits between each entity involved. Dynamic roles, distributed authority, rapid iterations and transparent rules replace static job descriptions, delegated authority, big re-orgs and office politics (more info here). Therefor, processes rule over human impulses by acknowledging them.

At HolacracyOne, they go as far as to call each other by their role names instead of using first names, to avoid confusing people with their role within the different circles. Yeah, that’s a whole new way of working, right. Although one can have doubts about the actual usefulness - or application, of this precise practice.

6/ It’s a leap into the unknown

So, when is the right time to adopt such a specific and disruptive organizational tool? There is no right time. The change is so massively disruptive that it’s never a good time. As Brian puts it, you can’t be ready to change the fundamentals of your organization, so you just have to throw yourself into it. Kind of like jumping off a cliff and hoping that the parachute you folded will open. There is no predicting what will happen to your organization if you adopt HolacracyⓇ, the only guarantee you have is your commitment to move forward with it.

“Even the most highly functioning organization will struggle during HolacracyⓇ adoption because it is a complete shift of paradigm” Rebecca

According to Chris, a standard full adoption takes 6 to 18 months depending on the organizations. But then, like any other skill, HolacracyⓇ takes practice, so you’re never “done” with it, you will have to keep on practicing for as long as you intend to use it.

Although one cannot predict which company will succeed in adopting HolacracyⓇ or not, we asked Brian, Rebecca, Chris and Eric about best and worst practices learned through their experience.

The usual reasons for failure are polarity (using the system halfway or maintaining a dual system), lack of commitment or alignment (usually from key power holder(s)), and misunderstandings (about what HolacracyⓇ can bring to the organization and what it can be used for).

“Holacracy in an organization is not sacred, it’s just a tool to use.” Eric

The preliminary data collected by the Harvard researchers the Washington State brought in to study and measure the effect of HolacracyⓇ on their in-house experiment show higher satisfaction and engagement from coworkers, and higher transparency in the organization. The expected ripple effects are increasing profit, sales, and capacity of employees to do more more quickly. These effects have been mentioned by many practitioners, but no data has demonstrated it so far. We’ll see what the rest of the study shows.

7/ It’s a work in progress

With the growing interest HolacracyⓇ meets, HolacracyOne needs to address the following challenge: “how do we support a blooming system?”. Presentations, workshops, trainings and events are organized all year long around the world, new coaches and consulting firms are trained and certified, new countries are reached...however, it still feels like HolacracyⓇ is in probation. It may be because of the lack of scientific data to support the benefits that the Holacracy Practice claims to offer. Or because of the radical and disruptive change it implies. Or because of people’s natural fear of the unknown. Or because of its “one-fits-all” approach people tend to find arrogant?

It may also be because of the “failure” stories that are quick to spread. Medium adopted HolacracyⓇ, then moved away from it (here). Zappos is known for struggling with HolacracyⓇ (even though they’re still committed to practising it), and the media love it. And...that’s it. That’s all we hear about, and that makes all the fuss about whether HolacracyⓇ“is the future” or “is doomed to fail”. The other fails (because there are others) rest in the unknown because it takes time to actually investigate if a system is working or not, an most of all in which conditions.

One thing is for sure, HolacracyⓇ seems to leave few people indifferent.